Maybank IB not expecting new taxes on capital gains, inheritance, carbon

KUALA LUMPUR: Maybank Investment Bank (Maybank IB) does not expect new taxes such those on capital gains, inheritance and carbon to be introduced in the 2019 Budget.

However, it sees “potential adjustments” in sin taxes, especially that of the gaming industry, which have not been reviewed for a while. As for alcoholic beverages and cigarettes, Maybank IB said the issue for the industries was whether there could be effective enforcement to curb the illicit market.

It said in a note there might not be any major taxes in the 2019 Budget as the Tax System Review Panel tasked with reforms only became operational last month and was expected to submit its recommendations in the middle of next year.

Maybank IB said the property sector might not see any relaxed macro measures in the budget.

Fiscal incentives would mainly focus on small and medium enterprises and productivity and technology adoption in view of the 11th Malaysia Plan mid-term review targets.

Maybank IB expects the 2019 Budget deficit to remain above three per cent of gross domestic product (GDP) at 3.5 per cent, but down from its estimate of 3.7 per cent for this year.

This is due to the impact of net consumption tax revenue loss from the abolition of the Goods and Services Tax, the RM35.25 billion tax refunds and unbudgeted costs such as 1Malaysia Development Bhd’s debt servicing.

“Market will be looking for details on how to bring the deficit back to three per cent of GDP by 2020,” it said.